Geopolitical considerations and lack of investment from the West undermine the security of energy supplies

Energy security is not a secondary issue that can only be addressed during political crises or market fluctuations, but rather a fundamental strategic element.

When energy security is neglected, its effects are not limited to the energy sector only, but extend to supply chains, affect prices, and spread throughout the entire economic system.

In a world of greater uncertainty, energy security must be treated as a permanent commitment within the framework of sound public policy.

For this reason, the current crisis must be understood correctly, as the world does not suffer from a shortage of natural gas, whether it is transported through pipelines or in liquid form.

What we are witnessing today is not a crisis of abundance, but rather a crisis of supply security shaped by geopolitical considerations, where energy itself has become the victim.

Strong infrastructure

The question is whether the infrastructure is strong enough to deliver gas to whomever and when it is needed, and at a cost that consumers in Asia and the West can afford.

Years of underinvestment have made answering this question more difficult than it should be.

Gas remains an indispensable part of the global energy mix, as it is abundant, efficient, and has multiple uses.

It also reliably supports electricity grids around the world, is vital for heating, industry and fertilizer production, and forms the basis for a wide range of petrochemical products and manufactured goods.

Gas is also becoming increasingly important for digital infrastructure, including artificial intelligence and data centres, whose need for continuous, high-quality energy is growing faster than many current systems and comprehensive decarbonisation scenarios can accommodate.

Increasing use

This is especially true for most countries in the developing world. In these countries, the increased use of natural gas is an integral part of a low-emissions future, because the most practical alternative is not to build ideal capacity that relies on renewable energy sources alone, but rather to continue to rely on more carbon-intensive fuels, such as coal, weaker electricity grids, and limited industrial growth.

Energy policy must start from physical reality, not from theoretical preferences.

Here the importance of the Strait of Hormuz emerges, as on a normal day, between 100 and 130 ships pass through it. About 30% of the fertilizers traded globally also pass through this important waterway, in addition to oil, basic petrochemical feedstocks, liquefied natural gas and sulfur. It is not just a narrow energy corridor, it is a sensitive point for agriculture, manufacturing and trade.

The impact of disruption is not limited to commodity markets, but extends to farms, factories, ports, grocery stores, national budgets, and ultimately consumers.

Yet, for too long, the world has acted as if vital roads would always remain open and stronger safeguards could be safely postponed.

This assumption is now clashing with reality, as recent attacks on energy infrastructure in the Middle East remind us that these assets are vital not only to economic activity, but to confidence in the broader system.

Regulatory policies

The deeper problem is that security of supply has been neglected in favor of other political priorities, and political wrangling in the West has often hampered investment in infrastructure that could have mitigated the impact of any disruption.

This has led to the West’s continued underinvestment in pipelines, LNG terminals, storage, processing capacity, maritime transport, and strengthening critical infrastructure.

Regulatory policies, no matter how well-intentioned, should not create greater uncertainty by hampering investment in gas supply and infrastructure.

Although there is a more diversified supply base, diversity of production does not in itself mean security.

Without a reliable transportation and communication mechanism, diversity does not mean much for security.

The global gas market no longer interacts in one way, Europe is primarily a storage and resupply market, while Northeast Asian countries focus on alternative shipments, energy and industrial security.

South Asian countries place the ability to bear costs and reduce consumption at the top of their priorities.

As for Africa, it is a market that focuses on achieving financial returns and prioritizing local needs, while North America balances local needs with exports.

As for Latin America, it is an indirect competitor in the Atlantic basin.

Clear response

Therefore, the political response must be clear and transparent. To mitigate shocks like the current one, policymakers in the West and other regions of the world should not impede investment in energy infrastructure, including LNG and pipelined gas projects.

To meet the growing and emerging demand, investment in gas is necessary, not as an alternative to renewable energy, but rather as a strategic complement to it.

This includes gas storage, which helps markets manage seasonal changes, absorb short-term shocks, and ensure reliable delivery.

Governments must also put security of supply back at the heart of energy strategies. Gas should not be viewed as just a transitional fuel. It is one of the pillars of a safe, affordable, low-carbon global energy system, which makes affordability possible, competitiveness sustainable, and emissions reduction reliable.

Without this, countries become more vulnerable to disturbances and fluctuations, and thus resort to more polluting or less reliable alternatives.

In a world where geopolitics and economic geography are increasingly interconnected, resilience to shocks must be seen as a strategic necessity. About “National Interest”

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Global crisis

The security of natural gas supplies is critical in today’s complex and interconnected energy system, and supply disruptions can have significant social and economic impacts, as demonstrated following the Russian war on Ukraine in February 2022.

During 2022 and 2023, Russian gas supplies through pipelines to Europe decreased by about 120 billion cubic meters, causing a global energy crisis that led to a rise in gas and electricity prices, sparked a wave of inflation, and increased geopolitical risks. The International Energy Agency responded quickly to this crisis by developing a plan to reduce the European Union’s dependence on Russian gas.

Shortly after the crisis erupted, a task force was established to monitor gas and clean fuel markets, supplies and energy security. In February 2023, an IEA Ministerial Meeting on Gas Markets and Security of Supply was held to further discuss and coordinate the response to the crisis.

. Political wrangling in the West has often hampered investment in infrastructure that could have mitigated the impact of any turmoil.

. The global gas market no longer interacts in one way. Europe is a market for storage and resupply, while South Asia’s top priorities are the ability to bear costs and reduce consumption.